Ultratech cements of the Aditya Birla Group reported a 42% drop in net profits at Rs756 crore on total net sales were higher 16% at Rs13,596 crore. This was largely on the back of higher power and fuel costs as well as weaker demand. Demand is traditionally slow in the second quarter due to the monsoons and the consequent construction demand. However, Ultratech expects demand to pick up on the back of recovery in retail and institutional demand with the receding monsoons. Energy costs were up 58% on a yoy basis.
The Competition Commission of India (CCI) imposed penalties of over Rs392 crore on MakeMyTrip, OYO and Goibibo. While OYO is a hospitality service provider, MakeMyTrip and Goibibo are travel portals. They are alleged to have indulged in unfair practices vis-à-vis competition. MakeMyTrip used to insist hotels to give them exclusive rights to their rooms, something that is classified as anti-competition. Apart from the penalty, CCI has also asked these 3 players to modify their agreements. This is business is just recovering.
Adani Group missed the date for launching open offer for additional 26% stake in NDTV, but said that it was committed to completing the offer. Adani had acquired NDTV through Vishvapradhan Commercial Pvt Ltd (VCPL), which has a stake in the holding company of the Roy family. VCPL and AMG Media had even proposed an open offer to acquire an additional 26% or 1.67 crore shares at Rs294 per share. Adani Media, led by Sanjay Pugalia, has been looking to set up a credible next generation digital media platform.
On Wednesday, 19th October 2022, the shares of Piramal Pharma listed at Rs201.80 on the BSE and at Rs200 on the NSE. It may be recollected that Piramal Pharma was formed by demerging the pharma business of Piramal Enterprises into a separate entity. The stock has been admitted in the T2T segment wherein only mandatory delivery is permitted. In consideration of the demerger, shareholders of PEL got an additional 4 shares of Piramal Pharma for every 1 share of PEL held by them. Carlyle has a stake in PPL.
Fitch has commented that India’s external buffers were sufficient to cushion risks of monetary tightening in the US. This is despite the sharp fall in the forex reserves by over $115 billion in the last 10 months. It may be recollected that Fitch had upgraded India’s rating outlook in June 2022 from Negative to Stable. Fitch also noted that India is less vulnerable to global shocks due to its substantial dependence on the domestic markets. Nearly one-third of the reduction in forex reserves is attributed to RBI INR intervention.
As per the data put out by the DGCA, India’s domestic air passenger volume grew 64.61% to 10.35 million in September 2022 on a yoy basis. Of course, the growth may look magnified due to the base effect as 2021 was when the second round of Omicron had taken roots. Average passenger load factor (PLF) was 500 bps higher at 77.5% on a sequential basis. Indigo continues to lead the domestic market with 57%. Tata’s combination of Vistara, Air India and AirAsia India cornered around 24.7% share in September 2022.
With the pressure of sanctions building up against Russia, India has been gradually shifting its stance in favour of the West. It had recently refused to support Russia at the UNGA on secret ballot on Ukraine. Now it emerges that a lot of crude procurement by India has shifted from Russia to Canada. It is estimated that around 3.3 million barrels of crude, produced in the oil sands of Alberta, will arrive in India in the month of November. With international sanctions on Russian crude tightening, India is not taking chances.
Delegates gathered for the London Bullion Market Association (LBMA) conference expect gold prices to rebound next year, despite higher interest rates. Normally higher rates increase the opportunity cost of holding gold and make it less attractive. They expect the price of gold to bounce back to $1,830/oz from the current levels of $1,650/oz. That would be a return of around 10% in a quarter. For most investors, gold continues to be a precious asset as a hedge against inflation and against geopolitical and macro risks.